Updated November 7, 2023
Indonesia
Overview
More recently, Chinese Coast Guard vessels reportedly
With over 279 million citizens, Indonesia is the most
have harassed Indonesian energy exploration vessels in the
populous country in Southeast Asia, the world’s most
South China Sea more frequently, and have accompanied
populous Muslim-majority nation, and the world’s third-
fleets of Chinese fishing vessels into Indonesia’s EEZ.
largest democracy (after India and the United States). It has
the world’s 16th-largest economy and the 7th-largest when
Political Background
ranked by purchasing power parity. It straddles vital sea
President Widodo, universally known by his nickname
lanes and borders the Strait of Malacca, one of the world’s
“Jokowi,” was reelected in 2019, winning 55% of the
busiest trade routes, as well as the Indian Ocean and the
popular vote. He campaigned on promises to improve
South China Sea. Over the past two decades, Indonesia has
Indonesia’s infrastructure and raise living standards,
become a robust democracy, holding four direct presidential
particularly in underdeveloped areas. One of his signature
elections, each considered by international observers to
initiatives is a plan to move Indonesia’s capital from Jakarta
have been largely free and fair. In the most recent, held in
to East Kalimantan, on the island of Borneo. Widodo has
April 2019, President Joko Widodo was reelected to a
delivered on some of those promises, enacting several
second five-year term. The next national elections are slated
economic reform packages aimed at streamlining
for February 14, 2024. President Widodo is barred by term
bureaucratic processes to boost foreign and domestic
limits from seeking a third term.
investment. However, poverty and uneven economic
development remain major issues.
The U.S.-Indonesia relationship has broadened in recent
years, with closer military and counterterrorism cooperation
and a range of new educational, environmental, and energy
programs initiated during the Obama Administration.
Indonesia’s foreign policy is guided by its historical role as
a leader of the Non-Aligned Movement, and successive
Indonesian governments have bristled at the notion of
aligning too closely with the United States or others,
including China. Indonesia is an active member in regional
diplomatic institutions, and served as the 2022 chair of the
Group of 20 (G-20) nations and the 2023 chair of the
Association of Southeast Asian Nations (ASEAN).
Some 87% of Indonesians are Muslim, with the vast
majority subscribing to moderate, syncretic forms of Sunni
Islam. Religious diversity is enshrined in the constitution.
Some observers, however, express concern about growing
political influence of conservative religious groups. Non-
Sunni Muslims and other religious minorities have been
targets of violence, and some conservative groups have
organized mass demonstrations against non-Muslim
politicians. Indonesia also has a history of violent
extremism: several bombings in Jakarta and tourist center
Bali targeted Westerners in the 2000s, and smaller-scale
attacks have occurred periodically.

Some observers have bristled at Widodo’s willingness to
bring authoritarian and conservative Islamist voices into his
Indonesia is increasingly involved in rising South China
cabinet. Defense Minister Prabowo Subianto, a former
Sea tensions. Although the two nations do not dispute
sovereignty over any land features, China’s extensive
Army Special Forces Commander, was implicated in a
“
range of human rights violations in the 1990s. Vice
nine-dash line” claims overlap with Indonesia’s Exclusive
President Ma’ruf Amin, a conservative Islamic leader, was
Economic Zone (EEZ), the coastal area over which a state
has the right to regulate economic activity. Indonesian
chosen at least in part to quell persistent criticism from
some Islamic groups that Widodo’s government is not
authorities periodically confront or warn off Chinese
sufficiently conservative. In the upcoming Presidential
fishing and law-enforcement vessels seen as encroaching on
Indonesian waters. In 2017, Indonesia elicited a formal
polls, Prabowo, Central Java Governor Ganjar Pranowo,
and Jakarta Governor Anies Baswedan have declared their
diplomatic protest from Beijing by renaming waters off the
candidacy. Widodo’s eldest son, Gibran Rakabuming Raka
Natuna Islands, north of Borneo, the North Natuna Sea.
is running for Vice President as Prabowo’s running mate.
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Indonesia
U.S. Engagement with Indonesia
Japan, South Korea, and China. It is also the world’s
The United States engages Indonesia across a wide range of
leading exporter of palm oil. Despite its large population,
issues, encouraging Indonesians to deepen their democratic
Indonesia is the 24th-largest U.S. trading partner, ranking
institutions, promote religious tolerance and the rule of law,
below neighbors such as Singapore, Malaysia, and
develop a more liberal trade and investment climate,
Thailand. Bilateral trade totaled $47.5 billion in 2022.
combat terrorism, and engage on international issues such
as maritime security and climate change. In 2015, the
Indonesia has imposed some policies criticized by foreign
United States and Indonesia upgraded their bilateral
investors, including foreign ownership restrictions and local
“Comprehensive Partnership” to a “Strategic Partnership,”
content requirements in some industries, and has forced
with a minister-level dialogue intended to address maritime
renegotiation of contracts for some energy and mining
cooperation, defense cooperation, economic growth and
projects. President Widodo has actively courted FDI,
development, energy cooperation, cooperation on global
particularly in the infrastructure sector. U.S. investment in
and regional issues, and people-to-people ties. Most U.S.
Indonesia totaled $11.9 billion in 2022.
assistance supports health, environmental, and educational
initiatives. Indonesia is part of the Indo-Pacific Maritime
Human Rights Issues
Security Initiative, which aims to strengthen Naval and
Most observers say Indonesian human rights protections
Coast Guard capabilities in the region. In 2022, the two
have improved over the past 15 years. However, abuses still
countries finalized several agreements, including a $698
occur, including some by members of the military. Alleged
million Millennium Challenge Compact supporting climate-
abuses are particularly frequent in areas with simmering
conscious infrastructure development, as well as pacts on
secessionist movements such as Papua. Some analysts
Coast Guard capacity building and support for sustainable
argue that religious intolerance is rising. Islamist
fishing, marine biodiversity, and reducing plastic pollution.
organizations have harassed and attacked minority religious
groups, including Christians and other Islamic sects, such as
Security Cooperation
the Shia and Ahmadiyya. In 2016, large demonstrations by
U.S.-Indonesia security cooperation has deepened over the
Islamist groups opposed to Jakarta’s Christian governor
past decade, with the two militaries conducting around 170
raised concerns about creeping intolerance.
annual engagements, including on maritime security
cooperation and combatting terrorism. This represents a
The State Department’s 2023 Trafficking in Persons report
sharp change from the early 2000s, when U.S. policies
listed Indonesia as a Tier 2 nation and reported it “does not
enacted in response to earlier human rights abuses by
fully meet the minimum standards for the elimination of
Indonesian forces severely limited bilateral engagements. In
trafficking but is making significant efforts to do so.”
1999, Congress suspended all International Military
Corruption is relatively widespread: Transparency
Education and Training (IMET) programs with Indonesia
International ranked Indonesia 110th out of 180 nations in
after Indonesia’s military, particularly the Kopassus special
its 2022 Corruption Perceptions Index, below other Asian
forces—headed at the time by Defense Minister Prabowo—
nations such as China and India. However, many observers
and militia proxies killed over 1,000 in Timor-Leste
say Indonesia’s democratic system and its growing
following Timor’s vote to pursue independence from
independent press and civil society are creating a more
Indonesia. Programs were restarted on a limited basis in
accountable system in which people can choose their
2002 and, from 2005 to 2010, the United States largely
leaders and participate in policymaking through community
normalized military relations. In 2010, the United States
or nongovernmental organizations.
resumed limited IMET programs with Kopassus.
Environmental Issues
Militancy and Terrorism
The United States conducts numerous environmental and
Indonesia has had a long-running issue of domestic
clean energy programs in Indonesia, which is among the
militancy, and the Islamic State (IS) has raised concerns
world’s most biodiverse countries. In 2022, the United
among many in Indonesia by conducting recruiting in
States, Japan, and Indonesia announced a Just Energy
Bahasa Indonesia, Indonesia’s national language. In 2018,
Transition Partnership (JETP), aimed at accelerating private
Indonesia amended its 2003 Anti-Terrorism Law,
investment in sustainable energy. Indonesia has made some
lengthening periods for which suspects can be detained
progress on environmental issues such as deforestation, but
without charge and broadening police rights to prosecute
its record of environmental protection is constrained by
those who join or recruit for militant groups. U.S.-Indonesia
weak rule of law and poor land management. Because of
counterterrorism cooperation is close; the United States and
deforestation, Indonesia is a major emitter of greenhouse
Australia helped to create Indonesia’s elite counterterrorism
gases—the world’s third- or fourth-largest when emissions
unit, Densus-88, which has weakened militant groups such
from deforestation are considered. Illegal logging remains
as Jemaah Islamiyah (JI), an Al Qaeda affiliate responsible
rampant. In the 1960s, forests covered 82% of Indonesia;
for several bombings in the 2000s.
today, they cover 49%. Extensive wildfires cause severe air
pollution each year. Climate change has led to recurrent
Economic Issues
poor harvests. In 2022, Indonesia twice instituted palm oil
In recent years, Indonesia’s economy has frequently posted
export bans, increasing the global costs of cooking oil.
growth of more than 5%-6% annually, buoyed in part by
favorable demographics (66% of its population is of
Ben Dolven, Specialist in Asian Affairs
working age). It is a large producer of natural gas and oil, as
well as critical minerals including nickel, and a major
IF10247
supplier to the large economies of Northeast Asia, including
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Indonesia


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https://crsreports.congress.gov | IF10247 · VERSION 50 · UPDATED

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